Wall Street’s concern about an AI bubble may be premature, as Evercore ISI’s Julian Emanuel believes the current AI rally has more room to grow. Despite 67% of respondents fearing a bubble, Emanuel estimates only a 25% chance of overshooting the S&P 500’s 2026 target of 7,750 to reach 9,000. Current sentiment and gains are nowhere near dot-com levels, suggesting further upside. Evercore recommends focusing on the top AI leaders like Amazon, which saw its AWS revenue grow 17.5% YoY to $30.9 billion in Q2. Intense competition from Azure and Google Cloud is present, but the momentum in the AI market could keep AWS growing. Amazon’s investment in Anthropic, a leading private AI LLM company, is also propelling its stock. Analysts have a mean price target of $265.19, implying a 16.5% upside potential. Microsoft, through its investments in OpenAI, is at the forefront of the AI revolution, with its revenue growing 18% YoY in Q4 FY 2025 to $76.44 billion. Azure’s 39% growth may make it the largest cloud computing platform soon. Analysts have a mean price target of $625.53 for Microsoft, indicating a 21.59% upside potential. Nvidia, the leading provider of AI training hardware, plans to invest $100 billion in OpenAI for its data center buildout. Analysts have a mean price target of $213.51 for Nvidia, suggesting a 16.3% upside potential.

Read more at Yahoo Finance: The ‘Irrational Exuberance’ in AI Stocks Isn’t Going Anywhere. Buy These 3 Top-Rated Names Here.